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            Biden State of the Union address likely boosted Democrats' 2024 confidence – NPR

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                  How India’s COVID Crisis Is Devastating Entertainment Sector – The Hollywood Reporter

                  by Editor
                  May 11, 2021
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                  How India’s COVID Crisis Is Devastating Entertainment Sector – The Hollywood Reporter
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                  The devastating second wave of the COVID-19 crisis in India has turned many sectors of the local economy upside down, including the country’s storied entertainment industry, which was still reeling from the effects of last year’s first wave of the pandemic.

                  India is currently the epicenter of the global COVID-19 pandemic, with the country accounting for over 3.7 million active cases while the total death toll has crossed 246,000. In the first week of May, a World Health Organization report stated that India accounted for 46 percent of new cases recorded worldwide and 25 percent of deaths.

                  As the second most populous nation on earth, with over 1.3 billion people, the ongoing crisis has overwhelmed the country’s medical infrastructure, leading to a humanitarian crisis.

                  In recent months a host of Indian celebrities have also tested positive, including Aamir Khan, Alia Bhatt, Ranbir Kapoor, Vicky Kaushal, Bhumi Pednekar and Deepika Padukone, who underwent treatment. Tragically, there have also been some fatalities among the esteemed elder corps of Bollywood, such as actor Bikramjeet Kanwarpal (whose credits include the spy drama Special Ops on Disney+ Hotstar), veteran composer Shravan Rathod and classical music icon Pandit Rajan Mishra.

                  While cinemas gradually began to open in October with limited seating and film shoots resumed, the devastation caused by the ongoing second wave since March has now brought everything to a halt. The wildly popular cricket event Indian Premier League, which has been a massive streaming success for Disney+ Hotstar, had to be suspended mid-season due to the pandemic. Brief attempts to keep India’s most beloved game going amid the carnage of the new wave was met with widespread criticism over the resources used to protect wealthy and healthy players, prompting organizers to agree to a full, ongoing shutdown.

                  “Everyone is making plans and contingencies based on an assessment of when things will open up, but there is no way of knowing that,” Producers Guild of India president Siddharth Roy Kapur tells The Hollywood Reporter. “It’s a bit like drawing up plans on the beach and then the waves come and wash them away before you know it.”

                  Kapur says nearly every major Indian film production is on hold following the implementation of lockdowns in April in the western state of Maharashtra, home to the country’s entertainment epicenter, Mumbai. While some shoots, mostly for television shows utilizing indoor sets, temporarily shifted base to other states such as Goa, the severity of the second wave has brought things to a standstill across regions. Many major cities also are imposing curfews and lockdowns, including the national capital Delhi, a popular shooting location but currently the pandemic’s worst-hit major population center.

                  Kapur, who was earlier head of the Walt Disney Co. in India, now runs his own banner, Roy Kapur Films, which has seen a number of its projects suspended. The disruption to the company’s films and series is “being mirrored all over the industry,” he says.

                  Lazy loaded image

                  People refill medical oxygen cylinders for Covid-19 coronavirus patients at an oxygen refile station in Allahabad on April 20.
                  SANJAY KANOJIA/AFP via Getty Images

                  Similarly, Amazon Prime Video’s debut Indian feature co-production, Ram Setu, starring superstar Akshay Kumar, is currently on hold. In early April, Kumar tested positive and was briefly hospitalized but recovered soon after.

                  With shoots stalled, daily wage workers employed in various capacities in film and TV crews have been hit especially hard. Last year, the Producers Guild launched a relief fund for workers which also saw Netflix contributing $1 million. Kapur says the Guild is again reaching out to its members to raise funds. While the Guild has yet to release figures, it is estimated that over last year and this year, the relief fund has raised about $2 million.

                  Meanwhile, as the country embarks on a massive vaccination drive — over 170 million doses have been administered so far — some corporate entities in the industry are stepping in to assist the government’s lagging public health efforts. Leading production banner Yash Raj Films announced that it would pay for the vaccination of 30,000 members of the Federation of Western India Cine Employees. The company has sent a letter to Maharashtra chief minister Uddhav Thackeray to  allow it to purchase vaccines.

                  In addition, YRF’s Yash Chopra Foundation will initiate a direct benefit transfer of $68 (5,000 rupees) to women and senior citizens of the industry and distribute ration kits to workers for a family of four for an entire month through non-profit organization Youth Feed India.

                  The Walt Disney Company India and its Star network announced it would contribute $6.8 million for local Covid-19 relief efforts, building upon the $3.8 million it contributed last year.

                  When it comes to the financial impact of the pandemic, analysts estimate that 2021 could be even more dismal than 2020. According to an annual report by consultants Ernst and Young, total revenue for India’s media and entertainment industry — covering all sectors including film, digital, TV, music, print, animation and gaming, among others — fell by 24 percent in 2020 to $18.7 billion (1.38 trillion rupees) compared to $24.7 billion (1.82 trillion rupees) in 2019 — “in effect taking revenues back to 2017 levels.”

                  The television industry saw its total revenue falling moderately to $934 million (685 billion rupees) from $1 billion (787 billion rupees) in 2019. However, digital saw a boom with video subscriptions jumping to $57.8 million (42.2 billion rupees) from $38.4 million (28.2 billion rupees) and EY predicts this figure could reach $76.3 million (56 billion rupees) in 2021.

                  But the film business was the worst hit with 2020 revenue crashing by more than half to $1 billion (76 billion rupees), compared to $2.6 billion (191 billion rupees) in 2019.

                  “The current crisis, from a cash flow and bottom line point of view, is worse than last year for the industry,” Reliance Entertainment CEO Shibashish Sarkar tells THR. “A substantial amount of cash which got invested in new projects is stalled. In terms of working capital locked and lack of monetization, the situation is worse than last year.”

                  With cinemas shut for six months in 2020 starting with a two-month long national lockdown imposed last March, a slew of releases skipped theatrical release and went straight to digital as producers scrambled to supplement revenue. As restrictions for public spaces were gradually eased and cinemas began reopening from October, the box office seemed to slowly recover, thanks largely to some South Indian language hits such as Tamil title Master, which collected an estimated $33 million (2.5 billion rupees) and Telugu release Krack, which grossed an estimated $8.15 million (600 million rupees). Hollywood also pulled in audiences with Godzilla vs Kong collecting $8.7 million in its two week run when it opened in late March, making India amongst the top-ten foreign territories for the Warner title.

                  The theatrical industry saw a ray of hope from October until early April this year when the second wave hit and cinemas shut down again until further notice. The successes seen in these months “reinforced our faith in the Indian theatrical business,” Inox Leisure CEO Alok Tandon tells THR. As India’s second-largest multiplex chain after PVR Cinemas, Inox runs 648 screens in 69 cities. Tandon is confident that when cinemas re-open, Hollywood titles like Top Gun: Maverick, No Time to Die, Mission: Impossible 7 and big ticket Indian releases will bring audiences back. “If the content works, people will come back to theaters,” he says.

                  In the brief window when cinemas did reopen, mainstream Hindi language Bollywood didn’t see any major performers, since highly anticipated titles such as actioner Sooryavanshi, starring veteran Bollywood star Akshay Kumar, and cricket drama 83, both from Reliance, have been on hold for over a year.

                  Sarkar can’t confirm when these titles will release in cinemas given the ongoing situation but says “we are extremely confident of the product and whenever they come to theaters, audiences will love them.”

                  The enormity of the pandemic has also led to digital releases being postponed. Director Rakeysh Omprakash Mehra’s boxing drama Toofan, starring Farhan Akhtar, was headed straight to Amazon Prime Video, eyeing a May 21 bow, but its release has now been put on hold. “In light of the severity of the situation, our focus is completely on the pandemic and on supporting our employees, their families and in helping the wider community,” Akhtar said in a statement, adding that a revised release date would be shared later.

                  With the traditional film business under a cloud, producers have begun to veer towards creating more digital content. Sarkar says that for Reliance, “not just last year but over the last two or three years, we used to be around 90 percent in films, which has now come down to 60-65 percent while 30-35 percent content is for OTT and television.” Reliance also has an animation unit that produces shows such as Little Singham for Discovery Kids, Smashing Simba for Cartoon Network and Golmaal Junior for Nickelodeon. Unlike other productions, Sarkar says animation projects have been ongoing since last March just when the pandemic first hit “and employees were given hardware, software and proper bandwidth to work from home.”

                  But the current halt in productions could also affect content pipelines for digital platforms if last year’s figures are any indication. According to the Ernst and Young report, 2020 saw OTT players spending over $138 million (10.2 billion rupees) on creating around 1,200 hours of original content across 220 titles (excluding acquired movie rights and sports) which was a reduction of 27 percent from $190 million (14 billion rupees) in 2019 for around 385 titles. The reduced content spend in 2020 was caused by a five-month stoppage of productions.

                  However, last year also saw digital platforms ramping up their acquisitions of film titles, with Amazon Prime Video India first off the block when it picked up a number of films starting with Gulabo Sitabo toplined by Indian screen icon Amitabh Bachchan co-starring with Ayushmann Khurrana. This obviously led to a furious debate over disrupted release windows which has become even more pronounced this year.

                  For instance, the much-awaited title Radhe: Your Most Wanted Bhai starring Salman Khan announced a simultaneous release on digital, via the Zee5 platform, in addition to cinemas, and is slated to premiere on the May 13 Eid holiday weekend.

                  The situation obviously upset cinema owners who were banking on Khan’s mass appeal to bring in crowds, though given the ongoing situation, its highly unlikely if cinemas can actually open this month leaving Radhey to bow on digital, as experts warn that India could well be hit with a third wave of the pandemic at some point. Assuming a theatrical release was possible, Tandon is clear that his cinemas would not have run Radhe as a simultaneous release “because Inox believes that theatrical windows should be followed.”

                  Streaming giants, however, see things differently. “A year ago I told you there will be several disruptions leading to innovations, and at that time there was no evidence of any of this except for the fact that we had a lockdown,” says Amazon Prime Video India director and head, content, Vijay Subramaniam, referring to a statement to THR last year after the company unveiled a slew of acquisitions. “I continue to hold that view very firmly and what you are seeing is disruptions leading to innovative approaches to windows,” he adds, explaining how box office hit Master released on Amazon just two weeks after its theatrical run in January, as opposed to the traditional six to eight-week window in pre-pandemic times.

                  But the disruption in windows has come at a heavy price for cinemas considering India has always been an under-screened market with only about an estimated 9,000 screens. That number is believed to have fallen further with estimates indicating that about 1,500 single-screen cinemas had to shut shop over the last year due to the pandemic.

                  Tandon says that it is difficult to assess how many cinemas closed and he reckons that “not more than 500-600 single-screen cinemas have shut and this is by hearsay since we don’t have any official data.” But he points to the South Indian market, which has more single screens “which did very well [with local titles when cinemas opened].”

                  However, even a publicly listed multiplex chain like Inox had to take a hit in the 2020 financial year which ended on March 31, 2021. The company’s total revenue dropped sharply to $16.1 million (1.19 billion rupees) from $260 million (19.14 billion rupees) in the previous financial year. Despite the setback, Tandon says Inox still “has a strong balance sheet” and pointed to the promoter’s stake, held by a mix of holding companies and individuals, which was reduced to about 47 percent from 52 percent.

                  The financial restructuring also saw massive cost-cutting, with Tandon noting that monthly expenditures fell from about $11.5 million (850 million rupees) to $1.63 million (120 million rupees) last year. When cinemas were reopened, costs went up to between $3.4 million-$4.0 million (250 and 300 million rupees), “but the endeavor is to bring it down further.”

                  As the Indian entertainment sector continues to deal with the impact of the pandemic, there could be opportunities in identifying assets and companies for takeovers for recently launched International Media Acquisition (IMA) Corp., a New Jersey-registered company of which Sarkar is CEO and leading shareholder. IMA is set up as a Special Purpose Acquisition Company (SPAC), often called “blank-check companies,” which have no commercial operations and are formed strictly to raise capital through an IPO for the purpose of acquiring an existing company. IMA plans to raise $200 million-$230 million on the NASDAQ exchange within the next 12-18 months and has plans of targeting acquisitions in North America, Europe and Asia. Its management team includes the likes of David Taghioff, the former co-head of CAA’s global client strategy department who now heads Library Pictures International, Greg Silverman, former president of creative development and worldwide production at Warner Bros., who now heads Stampede Ventures, and former Disney India executive Vishwas Joshi, among others.

                  With India being a focus area for IMA, Sarkar explains that “there are businesses which look like they are available at interesting valuations and we definitely have an idea about the business fundamentals without factoring in the impact of the pandemic. So even if the business is not performing well because of COVID-19, we can assess if the fundamentals are strong.”

                  Once IMA Corp starts its operations, Sarkar says he will be relinquishing his position at Reliance to focus full time on running the SPAC outfit. Owned by the Reliance-Anil Dhirubhai Ambani Group, Reliance Entertainment also holds a minority stake in Amblin Partners.

                  Beyond just the impact on balance sheets, the pandemic is also leading to a re-assessment on the technical and creative fronts. “Cloud computing is going to facilitate in a big way” says Subramaniam, adding that he believes the use of CGI will be pressed into service even more “because you have learned the importance of protecting yourself against such forces of nature and you have to be smart about using technology even more. It will be a big mindset change to look at technology in a friendlier manner.”

                  Similarly, Subramaniam believes that onscreen storytelling itself will receive a reset thanks to the ongoing effects of the pandemic. “If you wanted to tell a story about a bunch of students who never meet for two years and only [interact] on social media, two years ago that script would have been a joke,” he says. “Today that would be a hot script.”





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